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Acquisitions
 12 Months Ended
Sep. 30, 2025
Acquisitions  
Acquisitions

2.     Acquisitions

2025

On April 25, 2025, the Company completed the acquisition of the Signature Management & Power (SM&P) business of Ultra Maritime, since renamed as ESCO Maritime Solutions (Maritime), for a cash purchase price of approximately $472 million, net of cash acquired. Maritime is part of ESCO’s Aerospace & Defense (A&D) segment, and its Signature Management and Power Management product lines are highly complementary to ESCO’s current naval programs: Signature Management offers solutions for surface ships and submarines that provide magnetic and electric field countermeasures to prevent underwater mine and sensor detection, and Power Management provides innovative and highly-engineered motors that drive critical ship propulsion systems with an ultra-quiet design ensuring low vibration levels to increase stealth capabilities. Maritime contributed $95.2 million in revenue in 2025 since the date of acquisition.

Since the date of acquisition, the operating results for the Maritime business have been included as part of the A&D segment. The acquisition date fair values of the assets acquired and liabilities assumed were primarily as follows: $72.2 million of cash, $22.9 million of accounts receivable, $16.2 million of inventory, $15.1 million of contract assets, $1.6 million of prepaid assets, $12.2 million of property, plant and equipment, $5.0 million of other assets, $9.7 million of accounts payable, $18.2 million of accrued expenses and other current liabilities, $104.5 million of contract liabilities, $3.5 million of other liabilities, $45.5 million of deferred tax liabilities, $290.5 million of customer relationships and $61.3 million of backlog. The customer relationships were determined to have a useful life of fifteen years and the backlog was determined to have a useful life of two years. The acquired goodwill of $226.5 million relates to the excess value associated with opportunities to expand the services and products that we can offer to our customers as well as access to new markets. We expect that approximately $100 million of this goodwill will be deductible for tax purposes.

Pro Forma Results

The following pro forma financial information for the years ended September 30, 2025 and 2024 presents the combined results of operations of ESCO and Maritime as if the acquisition had occurred on October 1, 2023. The pro forma financial information for the periods presented excludes the VACCO business which was sold in July 2025. The combined results of operations have been adjusted for the impact of certain acquisition-related items, including additional amortization of identifiable intangible assets, additional financing expenses and other direct costs. The impact of pro forma adjustments are tax-effected at the expected consolidated corporate tax rate. The unaudited pro forma financial information is not intended to represent, or be indicative of, the Company’s consolidated results of operations or financial condition that would have been reported had the acquisition been completed as of the beginning of each of the periods presented. This information is provided for illustrative purposes only and is not necessarily indicative of the Company’s future consolidated results of operations or financial condition.

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(Dollars in millions)

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(Unaudited)

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Pro Forma Results

    

FY 2025

    

FY 2024

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Net sales

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$

1,198.2

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1,097.3

Net earnings from continuing operations

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$

111.1

 

61.2

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2024

On November 9, 2023, we acquired MPE for a purchase price of approximately $56.2 million, net of cash acquired. MPE is a leading global manufacturer of high-performance EMC/EMP filters and capacitor products for military, utility, telecommunication, and other critical infrastructure applications. Since the date of acquisition, the operating results for the MPE business have been included as part of ETS-Lindgren in the Test segment. MPE contributed $10 million in revenue in 2024 since the date of acquisition. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.4 million of accounts receivable, $1.1 million of inventory, $1.7 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of deferred tax liabilities, and $31.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $29.1 million. The acquired goodwill of $30.6 million related to excess value associated with opportunities to expand the services and products that we can offer to our customers. We do not anticipate that the goodwill will be deductible for tax purposes. We paid a $0.2 million working capital settlement in the third quarter of 2024.

2023

On February 1, 2023, we acquired CMT Materials, LLC and its affiliate Engineered Syntactic Systems, LLC (together, CMT) for a purchase price of approximately $18 million, net of cash acquired. CMT, based in Attleboro, Massachusetts, is a supplier of syntactic materials for buoyancy and specialty applications. Since the date of acquisition, the operating results for the CMT business have been included as part of Globe in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $1.7 million of accounts receivable, $3.0 million of inventory, $1.3 million of property, plant and equipment, $1.2 million of accounts payable and accrued expenses, and $7.3 million of identifiable intangible assets mainly consisting of customer relationships totaling $6.2 million. The acquired goodwill of $5.6 million related to excess value associated with opportunities to expand the services and products that we can offer to our customers. The full amount of acquired goodwill is deductible for tax purposes. We received a $0.2 million working capital settlement during the third quarter of 2023.

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